Obviously this is a complex issue with no black or white answers. What I do know for sure, is that it is imperitive that
together, we, must explore the nuances and identify the shades of grey.
Let me give you a little background on where I come to this issue from. The Recording Industry Association of America represents record companies in this country that constitute about 90% of the music that's distributed legitimately in the United States. The record industry in the last three years has seen a staggering decline. In the last three years, we have lost over 31% of our market. Now some of you may think of that, well, in the dotcom era, people lost more than 31% in a lot shorter time than three years. But for an industry that was approximately 18 billion dollars in the United States annually to lose the percentage they've lost, after being in a stable industry for years, has had a profound impact. What that has resulted in is thousands of job losses in just my industry alone, tens of thousands of employees who have been laid off when you look beyond just the record companies themselves. It is everybody from the guy who is an upcoming A&R star to the businessman whose job it is to promote music to the fellow who works in the record store to the woman who drives the truck to deliver the music to the people who work in the CD manufacturing plants. We're talking about tens of thousands, if not hundreds of thousands, of jobs lost in the last three years. Given that intellectual property constitutes five percent of the gross domestic product of this country, we should be concerned. It is the single largest export the United States has, and it is something that we as a country should and must protect for our own economic interests.
Leave aside just the dollars and cents, it has an impact on the people who aren't associated with the industry. It's not only less tax dollars, it's less artists getting signed to labels because there's less money to sign those artists, and so that means there's less new music and there's a less diverse array of artists for people to hear and be exposed to from the record companies. It means there's less money for artists who want to put out albums that they wouldn't have otherwise put out. It is having an impact not just on business, but on the quality and quantity of music that record companies are putting out. They have had to slash artist rosters dramatically.
So, during this period, this three-year slide, what has happened to cause it? File sharing. In the same period that we've seen dramatic declines in the record industry business, we've seen an exponential growth of file sharing. There are now at any given time on the KaZaA network up to four million people on at one time, and there are upwards of eight hundred million files being distributed.
Now, many of you out there may be saying "Well, that's not all infringing, and so you shouldn't condemn the entire network." Well, let's consider what's on that network.
In the case of Napster, which was a very similar file-sharing network, we did a statistical study that was adopted by the United States District Court and then subsequently by the United States Court of Appeals that was overseen by a Stanford (sorry) stats professor. And what that statistical study showed was that 87% of the content on the network was infringing. Now, don't jump to the conclusion that 13% is not infringing, because that wasn't the case. 13% were things like file headers that had nothing in it, or Vietnamese folk music for whom we couldn't find the owners of it in time to submit it to the court. But there was an extremely low rate of non-infringing content.
In the case of KaZaA, we did a similar study and presented it to the United States District Court in Los Angeles, which was accepted, and showed that upwards of 90% of the content was infringing.
And as for the users of Napster, of that statistically relevant sample of users on the network, 100% of them were infringing. Not a single individual who was part of that sample was engaged totally in non-infringing activities.
So we have growing file sharing; we know that that file sharing is overwhelmingly infringing; we have a declining record industry; and the final piece of this puzzle that makes us absolutely certain that there is a correlation are the polls and surveys we've done, where repeatedly we hear individuals say they are buying less music because they are downloading more music. It's irrefutable. Almost 60% of the individuals we polled last spring said that they're buying less because they're downloading more.
So, to answer the question "Is file sharing a problem?" Absolutely. It is having a huge economic impact, and it's absolutely correlated--the economic impact is absolutely correlated to the file sharing. So let me turn to a question Tracy did not ask, which I think needs to be asked, and that is, What are we, the Recording Industry Association, doing about it?
The first thing we're trying to do is shut the networks themselves down from sharing infringing content--not all content. In the case of Napster, everybody -- How many people out there think that we shut Napster down? ... It's a smaller number than I expected. Most people think we shut them down. We did not. What we asked the court for an order ... All we asked the court to do was to make Napster stop distributing the infringing content. Technologically, that can be done. In fact, it was being done. Most people didn't like Napster when it didn't have the infringing content because that's why they were going to it, but right before they shut down they had implemented a filter that could almost 100% effectively filter out infringing content. That is all we are asking the courts to do in existing cases against the likes of KaZaA, Rockster, Morpheus. Those lawsuits are currently ongoing. While we've won in cases such as Napster and Aimster, which is also a local product, we have not been as successful in the case of Grokster. Some of you may have heard that a district court out in Los Angeles had denied our motion for summary relief. We've appealed that, and that argument will take place we believe in January in the Ninth Circuit Court of Appeals. We believe absolutely that decision will be reversed. In fact recently the United States Registrar of Copyrights, who's with the Library of Congress, testified before the United States Judiciary Committee on this case, and in her testimony the honorable Mary Beth Peters indicated that it cannot be the case that a file-sharing network can be built with the intent of profiting off of other copyrights and be allowed to exist, and that if the decision in the United States Circuit Court in Los Angeles were allowed to stand, it would "eviscerate" the concept of secondary liability of copyright. Now that may not mean a lot to those of you who aren't in law school or lawyers here, but from a legal viewpoint that is a very substantial statement by somebody who is unbiased on the issue.
So, in addition to suing the networks who are trying to profit from this infringement, we are also...we've been involved in an education campaign. I don't know how many of you have seen ads that have been on BET, or have been on radio, or have seen instant messages that we have sent to individuals who have been infringing. We've been trying to get the message out that you should not infringe; it hurts artists, and it hurts the record industry; you can be caught, and there are consequences.
Third, we've been trying to get legitimate alternatives out there. Many would complain that we have been late to this party; many of you might be right. But they're out there now. Have any of you been on Apple iTunes? Do people generally like it, apart from the fact that you're paying? Or the new MusicMap service, where you can download for 99 cents as well. Or the Rhapsody service, or Listen, where I believe you can download for 69 cents. There are a whole host of legitimate services up there now. They have different business models, they deliver music in different formats; none of us know where these are going to end up. Are we going to have an all-you-can-eat model where you pay monthly, or are we going to have a model where you pay 99 cents per download... I don't think we know. Our companies are out there, we're licensing everybody, and we're saying, let the consumers decide what they want. And these legitimate alternatives we think are a much more compelling experience than the illegitimate alternatives.
One last point, because this is what I think many of you want to hear about. Last but not least, we're suing individuals. We do this with great, great reluctance. For years we have had the ability to do this. We have not done it. We have not done it because we have been hoping that education would work, we've been hoping that by shutting down the networks distributing infringing content it would work, we've been trying to do everything we can to avoid suing individuals. The problem is that the growth rate of these networks has increased, notwithstanding everything else we did, because when we told people what they told us is, "Sure, you tell us something's going to happen, but nobody's ever done anything." So we had to in fact do what everybody has always been worried about, and that is enforce our rights in filing suits. We do it with great reluctance, but we must do it and we are doing it. We intend to file a couple hundred suits at a minimum every month against substantial infringers. There are no networks that are safe; we have pursued people on every network that's out there, so long as they are infringing. And I'm sure we'll talk more about this, but it has been an important part of our campaign to try to get the message out because ultimately we want to drive people to get music online, but get it from legitimate alternatives.
Y'know? Are you hearing me, motherfuckers?
Shellac. Yeah, that's right. Fucking pussy.
kerble wrote:I'm waiting until the vinyl comes out so I can make some dope hip hop beats on my turntables.
One for the stereo, one for the club and one still in plastic, cause it's a classic.
Good. Two good posts in a 20 page thread. Pathetic. I am furious.
